NFIB has engaged on this issue in every state. More than a dozen states have already enacted liability shields, including Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Utah, and Wyoming. Kentucky, Florida and other states have proposed legislation, while North Dakota, Missouri, Indiana, and Montana are moving forward with common-sense mmeasures.

Brad Jones, NFIB’s Missouri State Director, has described why liability protections matter so much: “Our small business owners and job creators need peace of mind as they get back to work and get back to doing what they do best: keeping Missouri’s economy running.” The same is true for small businesses in every state.  

Fortunately, last November, the IRS approved a workaround to restore some tax relief. Now NFIB is pushing to enact that workaround on a state-by-state basis, in the form of a tax credit against S-Corp income. Connecticut, Louisiana, New Jersey, Oklahoma, Rhode Island, and Wisconsin have already enacted this policy, while California has announced its intention to follow suit. NFIB is fighting for action in other states, too.

NFIB’s Illinois State Director, Mark Grant, explained what’s at stake: “States like Illinois have a terrible tax burden that holds small businesses back. While some policymakers want to raise taxes further, the better path is to restore some of the relief from the old federal SALT deduction. Such a move will strengthen small businesses – especially coming out of the pandemic and economic shutdowns.”

NFIB is taking every available avenue. In California, the NFIB Small Business Legal Center is suing the state for breaking the law when issuing its workplace regulations. In Virginia, NFIB is urging the Governor and the state Department of Labor to rethink their harmful regulations instead of simply re-issuing them.

John Kabateck, NFIB’s California State Director, expressed the frustration that small businesses are feeling: “When the Legislature is not heaping more new laws on the soon-to-be-broken backs of businesses, its entrenched bureaucracy can’t resist adding its own burdens. Now is the time to end the regulatory nonsense and restore regulatory common-sense, before it’s too late for small businesses.”

NFIB opposes these tax increases across the board. Specific proposals are still being worked out in many cases, such as New York, where Governor Cuomo has said tax hikes have to be considered without sufficient federal aid. Regardless, NFIB’s message to policymakers is simple: Raising taxes on small business will hold states back at the exact time they should be trying to move forward.

“As many states – including New York – confront historic budget deficits and fiscal turmoil, states must not look to struggling small businesses as a newfound source of untapped revenue,” said Greg Biryla, New York State Director for NFIB. “While the states’ fiscal distress is real, it’s nothing compared to the distress small businesses have shouldered day-in and day-out since March. Now is the absolute worst time to saddle Main Street with new taxes.”

The damage is especially serious in states like Texas where different cities have created a patchwork of paid leave policies. Small businesses don’t have the legal teams or resources to keep up with this fast-changing mandate landscape.

Annie Spilman, NFIB’s Texas State Director, described the stakes with paid leave mandates: “Small businesses know how to take care of their employees and communities. They don’t need top-down paid leave mandates, which typically do more harm than good. Now is the time to lower the burdens on small business, not raise them to the breaking point.”

Nearly 20 states have followed NFIB’s request to refill unemployment coffers using federal funding from the CARES Act. NFIB is now pushing other states to enact legislation that will protect small businesses from steep tax increases. Such tax hikes are unaffordable for small businesses still dealing with the damage of the past year.

NFIB Massachusetts State Director Chris Carlozzi described his state’s situation, which mirrors the reality in other states: “If small businesses in Massachusetts are expected to retain and create jobs to assist with the state’s recovery, lawmakers must take action to prevent a nearly 60% hike in unemployment insurance taxes. The longer it takes the Legislature to address this crisis, the slower the recovery will be.”

NFIB is fighting to stop or repeal these policies on every front. In Illinois, NFIB helped defeat a rule that would have leveled criminal penalties on small businesses that don’t uphold the state’s stay-at-home order. In Washington, NFIB is working to eliminate costly fines, new regulations, and new penalties for employers.

“Rather than threaten the very survival of even more small businesses with added restrictions, higher taxes, and unnecessary penalties, state regulators and lawmakers should focus on how to help them recover from this pandemic,” said Patrick Connor, NFIB’s Washington state director. “Let Main Street re-open safely, put people back to work, and provide our communities the products and services they need to thrive once again.”